Judge Grants Judgment for Defendant in FDCPA Case Over Garnishment from Joint Bank Account

In a case that was defended by Rick Perr at Kaufman Dolowich & Voluck, a District Court judge in Pennsylvania has granted a judgment on the pleadings for a defendant that was accused of violating the Fair Debt Collection Practices Act when it garnished a joint bank account despite allegedly knowing it contained funds immune from garnishment.

A copy of the ruling in the case of Widmers v. Weltman, Weinberg & Reis can be accessed by clicking here.

One of the plaintiffs — the husband of a married couple — defaulted on a credit card debt, was sued for not paying it, and had a judgment entered against him by the original creditor. The defendant filed for a writ of execution, seeking to seize funds that were in a bank account maintained by both the husband and the wife, which resulted in hundreds of dollars in unnecessary bank fees being levied.

The plaintiffs filed suit, alleging the defendant violated Sections 1692e and 1692f of the FDCPA because it should have known that the account was a joint account and was therefore exempt before seeking the writ of execution.

On the 1692e claim, the plaintiffs failed to indicate which documents contained the communications that were false or misleading, and only “vaguely assert” that a violation was made, but all of the documents that were sent to the plaintiffs complied with state law, noted Judge Karen S. Marston of the District Court for the Eastern District of Pennsylvania.

Ultimately, a collector does not violate the FDCPA if it garnishes funds from an account that contains immune or exempt assets, Judge Marston noted. If it knowingly seizes exempt assets, that is a different story. Under Pennsylvania law, the debtor is the one who has to assert when an exemption needs to be made. And the assertion needs to be more than a “self-serving statement that an exemption applies.”

“The bottom line here is that, right or wrong, a judgment creditor has no duty under either California or federal law to investigate, much less confirm, that a judgment debtor’s bank accounts contain only non exempt funds prior to authorizing a levy on those accounts,” Judge Marston wrote. “It is unreasonable to conclude that a judgment creditor’s failure to conduct a pre-levy debtor’s exam, when there is no legal obligation or requirement to do so, constitutes unfair or unconscionable action.”

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